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MongoDB Stock Surges Past Q3 Estimates Driven by AI and Cloud Demand
- MongoDB’s stock experienced a significant rally, exceeding Wall Street’s third-quarter projections.
- The company reported strong revenue and earnings per share, surpassing analyst expectations.
- Key growth drivers include the Atlas platform, AI tailwinds, and robust customer demand.
- CEO Chirantan Desai highlighted a once-in-a-lifetime opportunity fueled by AI and cloud trends.
- Despite a net loss, MongoDB’s outlook for 2025 remains optimistic, with raised revenue guidance.
MongoDB Stock Soars on Strong Q3 Financials
Database software provider MongoDB (MDB) has seen its stock price climb dramatically, surpassing third-quarter financial estimates announced yesterday. Following the earnings release on December 1, the company’s shares jumped over 15%, extending the gains to nearly 27% within 24 hours. Year-to-date, MDB stock has appreciated by approximately 40%, indicating strong investor confidence.
MongoDB announced adjusted earnings per share of $1.32 on revenues of $628 million for the third quarter. This performance significantly outpaced the consensus estimates of $0.80 in adjusted earnings per share and $592 million in revenue, according to analysts polled by LSEG. This robust financial report has energized market participants.
Following the announcement, Bernstein analysts revised their price target for MongoDB shares upward to $452. They anticipate continued stock appreciation, driven by sustained strong consumption demand, the potential benefits of interest rate cuts, and the significant upside from artificial intelligence advancements. As of publication, MDB was trading at $406.21, marking an increase of roughly $78.23 in the preceding 24 hours.
CEO Emphasizes MongoDB’s Once-in-a-Lifetime Opportunity
Chirantan āCJā Desai, CEO of MongoDB, expressed optimism during the company’s earnings call, describing the current market conditions as a once-in-a-lifetime opportunity. He pinpointed artificial intelligence, cloud services, and evolving data trends as critical factors pushing the industry towards a true inflection point. Desai outlined plans to prioritize innovation and strengthening customer relationships moving forward.
š” In the competitive database landscape, understanding the impact of AI and cloud adoption is crucial. Companies leveraging these trends, like MongoDB, are well-positioned for significant growth by offering scalable and adaptable solutions.
MongoDB Atlas Drives Revenue Growth and Boosts 2025 Guidance
MongoDB cited ongoing demand for AI technologies and broader market tailwinds to support an upward revision of its 2025 revenue guidance, particularly for its Atlas platform. The Atlas cloud database-as-a-service experienced a 30% year-over-year growth, contributing nearly 75% of the total revenue in the third quarter. The company now forecasts 2025 revenues to range between $2.434 billion and $2.439 billion, an increase from its prior projection of $2.34 billion to $2.36 billion.
The Atlas platform served over 60,800 customers by the end of the quarter, with projections for current-period revenue growth of around 27%. Overall revenue for MongoDB saw a 19% year-over-year increase. Desai highlighted substantial growth within the large enterprise segment during Q3, alongside excellent performance in the company’s self-service business.
The MongoDB chief executive also noted a healthy expansion of its customer base, with new customer acquisitions showing continued strength. He emphasized that companies across various industries and geographies are selecting MongoDB due to its unified data platform capabilities, which address complex data management needs.
MongoDB Reports Net Loss Despite Strong Revenue Quarter
Despite the impressive financial performance, MongoDB reported a net loss of $2.01 million for the third quarter, equating to approximately 2 cents per share based on 81.4 million shares outstanding. This contrasts with a net loss of $9.78 million, or 13 cents per share, reported in the same period of the previous year. The company anticipates fourth-quarter revenue to fall between $665 million and $670 million.
The loss from operations in Q3 fiscal year 2026 was $18.4 million, a reduction from the $27.9 million loss from operations recorded in the same quarter of fiscal year 2025. MongoDB utilized $1.7 million for principal payments on finance leases, resulting in free cash flow of $140.1 million. As of October 31, the company maintained a strong liquidity position with over $2.3 billion in cash, cash equivalents, restricted cash, and short-term investments.
š Understanding cash flow is crucial for assessing a company’s financial health. An increase in free cash flow, even with a net loss, can indicate operational improvements and financial stability, as seen with MongoDB’s $140.1 million free cash flow.
Desai reiterated that MongoDB’s Q3 results exceeded the upper end of its guidance, attributing this success to effective go-to-market strategies and broad demand across its business segments. He also highlighted the company’s achievement of meaningful margin outperformance through its execution of profitable growth initiatives.
Frequently Asked Questions about MongoDB’s Financial Performance
What were MongoDB’s Q3 earnings and revenue?
MongoDB reported adjusted earnings per share of $1.32 on $628 million in revenue for the third quarter. This surpassed analyst expectations.
How did the Atlas platform perform in Q3?
MongoDB’s Atlas platform demonstrated strong growth, increasing 30% year-over-year and accounting for nearly 75% of total Q3 revenue. It is projected to grow 27% in the current period.
What is MongoDB’s updated revenue guidance for 2025?
The company has increased its revenue forecast for 2025 to between $2.434 billion and $2.439 billion, up from its previous guidance.
Did MongoDB achieve profitability in Q3?
While MongoDB reported strong revenue figures, the company recorded a net loss of $2.01 million in the third quarter. However, free cash flow was positive at $140.1 million.
What factors are driving MongoDB’s growth?
Growth is being driven by strong demand across its business, particularly from AI and cloud trends, advancements in its Atlas platform, and a growing customer base, including a significant expansion in the large enterprise segment.
MongoDB’s Outlook: Capitalizing on Data and AI Trends
MongoDB’s strong financial performance and optimistic outlook underscore its strategic positioning in the rapidly evolving technology landscape. The company’s ability to exceed market expectations, particularly driven by its Atlas platform, highlights the increasing demand for flexible and scalable data solutions.
The CEO’s emphasis on a once-in-a-lifetime opportunity signals MongoDB’s ambition to leverage the current wave of AI and cloud computing advancements. By focusing on innovation and customer engagement, MongoDB aims to solidify its market leadership and capitalize on the transformative potential of data in the coming years.
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